The American Empire, like other empires in the past, relies on two myths. The first is that, internally, the American system is a meritocracy. "Hard work and enterprise can overcome a disadvantage at birth whereas rich good-for-nothings soon lose their wealth". The second is that American foreign policy is principled and essentially just. "It is sometimes misguided, but never malevolent".
The first story is meant primarily for domestic consumption. The second dovetails neatly with a similar story that European governments tell about themselves and is required to maintain a vicious transatlantic alliance. Of course, neither tale stands up to any serious scrutiny. Research has repeatedly shown that social mobility in America is low (see for example ). The claim about Western foreign policy hardly requires a rebuttal.
Nevertheless, it is hard to overstate the importance of this narrative. Americans would probably revolt without the chimerical hope offered by the American dream. Western foreign policy would be untenable without the soothing moral justifications offered by governments in North America and Europe.
As Herman and Chomsky have pointed out, this narrative is kept in place with the help of a massive propaganda system. Yet, this propaganda can hardly be successful unless the governments involved maintain at least the appearance of fairness and justice.
From the viewpoint of the American ruling elite, one of George Bush’s most serious transgressions was to wreck this narrative. Abu Ghraib and Guantanamo are discussed repeatedly not because they were the most serious crimes committed by the US in its war against terror (they were not) but because it is impossible to reconcile the image of gloating American soldiers standing over Iraqi captives with the notion of a benevolent and just empire. Halliburton’s war profiteering hardly compares to the immense profits made by American corporations as they looted Eastern European and Asian economies in the nineties. However, Clinton’s advisers spun out sophisticated free market rhetoric to justify their actions that Dick Cheney was unable to match. The first Gulf war was every bit as criminal as the second gulf war. Yet, Obama held it up as a model of external intervention because Bush Sr. was able to "garner the clear support and participation of others" . The initial amount spent on the Paulson plan is comparable to the amount the US government spends on the defense budget year after year; money that ultimately goes to subsidize high-tech corporations. Yet the bailout raised hackles, because it stripped the system bare of its veneer of fairness.
This is the central reason for elite disenchantment with Bush. George Soros, who has consistently argued against Bush on strategic grounds, articulated this viewpoint succinctly: "An endless war … is doing great damage to our power and prestige … it has tarnished our adherence to universal human rights … [and] diverted attention from … finishing the job …in Afghanistan."
Obama’s main achievement has been to resurrect this narrative. As the Economist, a candid and influential proponent of the capitalist world order, explained while endorsing Obama: "Merely by becoming president, he would dispel many of the myths built up about America; it would be far harder … to claim that American democracy is a sham. America’s allies would rally to him… he would … lessen the tendency of American blacks to blame all their problems on racism".
The day after the election, the Washington Post was delighted that "America had produced … inspiring and overdue proof that the American dream was still alive."  The New York Times shared this euphoria as it approvingly quoted a British historian: "[Obama] brings the narrative that everyone [sic] wants to return to … that America is the land of extraordinary opportunity." 
Obama, himself has consistently adopted the standpoint of a pragmatic imperialist. In 2002, he explained that he opposed the war in Iraq only because it was "dumb" and "rash"; even though he was speaking at an anti-war rally, he spent much of his speech justifying the war in Afghanistan!  Obama’s hawkishness on the Afghanistan war has already caused damage; the Bush administrations decision to launch cross-border raids into Pakistan was almost certainly influenced by Obama’s outspoken support for this tactic. The contours of Obama’s cabinet are not yet clear but the inclusion of establishment hawks like Joe Biden and Rahm Emmanuel hardly makes for an auspicious start.
Despite this, Obama’s campaign has already had a debilitating effect on the anti-imperialist movement. In 2004, several thousand people turned up to protest the Democratic National Convention in Boston. In 2008, the Democratic campaign claimed so much of the energy of popular movements that not even a hundred people turned out to protest the 5th anniversary of the war. Moreover, Obama’s campaign, for all its reliance on grassroots groups, has hardly advanced progressive politics. If it had, one would have expected genuinely progressive candidates like Nader and McKinney to get a far larger share of the vote than they did, at least in the so-called safe states.
Somewhat more seriously, Obama’s victory seems to have resulted in an international propaganda coup. Across Europe, governments are already warming up to Obama . This is ominous for it heralds the return to strength of an alliance between Western ruling elites that has consistently opposed independent development anywhere in the world. In India even the communist parties, that have consistently taken an anti-imperialist position, seem sympathetic to Obama. Sitaram Yechury’s latest article  is almost hopeful in stark contrast to the CPI(M) position four years ago .
When Bush visited India there was so much popular outrage that the government could not arrange for him to address parliament. As Arundhati Roy put it, he was forced to address the animals at the Delhi zoo instead! However, when Clinton visited India, he did address the parliament. I remember watching as Indian parliamentarians, in a sickening show of servility, fell over themselves just to touch the great man as he walked down the aisle. Obama will probably induce a repeat-performance.
Obama is undoubtedly better than McCain would have been. His election should be greeted with relief. However, his victory should be understood as a tactical retreat by the American ruling elite and not as a mandate for progressive change. Unless progressives all over the world appreciate this, Obama might genuinely succeed in reviving the American dream and restoring America’s "position in the world". That would be very unfortunate.
1) "Intergenerational Mobility in Europe and North America", Jo Blanden, Paul Gregg and Stephen Machin
2) "Renewing American Leadership", Barrack Obama, Foreign Affairs, July/August 2007
3) "A Self-Defeating War", George Soros, Wall Street Journal, 15 August, 2006
5) "U.S. Again Hailed as ‘Country of Dreams’", Washington Post, 6 November,2008
6) "For Many Abroad, an Ideal Renewed", New York Times, 5 November,2008
8) "Extraordinary change, but will it change ordinary lives for the better?" Sitaram Yechury, People’s Democracy, Nov 9, 2008
9) "US Elections and India’s Stand", Polit Bureau statement, Nov 5, 2004